Bitcoin rallied overnight, reaching a new all-time high as former President Donald Trump claimed victory over Vice President Kamala Harris in the U.S. presidential election. The flagship cryptocurrency surged to $75,000 late Tuesday, smashing its previous record. By Wednesday, it was trading 6% higher at $73,841, according to Coin Metrics.
This rally pushes Bitcoin past its former peak of $73,797, last seen in March. Market analysts say Trump’s win has spurred new excitement among crypto investors, as his policies are expected to be favorable to the industry.
Pro-Crypto Policies Boost Investor Confidence
The cryptocurrency surge is linked to anticipated pro-crypto policies from Trump. He has championed deregulation, potential tax cuts, and a move away from reliance on traditional financial institutions. “The themes around the Trump trade for crypto are deregulation, potential tax cuts, and overall support for risk assets,” explained Sylvia Jablonski, CEO at Defiance ETFs, in an interview with CNBC.
Trump’s promises include creating a crypto advisory council within his first 100 days, launching a national bitcoin reserve, and encouraging U.S.-based bitcoin mining. His victory signals a possible regulatory shift that has emboldened the crypto sector.
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Bitcoin’s rally sparked a chain reaction across the crypto market. Ethereum surged 8%, and Solana’s token skyrocketed by 11%. XRP, a popular payment token, jumped 4%, while memecoins saw a substantial boost, with Dogecoin climbing over 20%.
Stock markets also reacted to the crypto upswing. Shares of crypto exchange Coinbase surged by 13% in premarket trading. MicroStrategy, known for its large Bitcoin holdings, advanced 14%, reflecting investor optimism in the cryptocurrency’s future.
Investors See Bitcoin as Inflation Hedge
Amid rising concerns over U.S. debt and inflation, Bitcoin has emerged as a hedge against economic uncertainty. The federal deficit recently increased by 8%, reaching $1.8 trillion. Trump’s proposed tax cuts have further heightened these concerns.
Many investors view Bitcoin, like gold, as a protection against inflation. The potential for future fiscal policy changes under Trump’s administration has amplified interest in decentralized assets like Bitcoin.
Crypto Industry Eyes New Regulatory Environment
Trump’s promise to replace SEC Chair Gary Gensler, a figure seen as unfriendly to crypto, has energized the industry. Gensler has faced criticism for regulating crypto through enforcement rather than clear guidance, which has led to uncertainty for U.S.-based crypto firms.
Anthony Yeung, global head of strategic development at CoinCover, commented on the potential regulatory shift: “President-elect Trump’s plan to make the U.S. the ‘crypto capital’ of the world is exciting, but the details remain unclear. The industry hopes for regulations that protect consumers without stifling innovation.”
Bitcoin’s Election Year Boom Continues
Bitcoin has historically benefited during U.S. election years, with returns of 87%, 44%, and 145% following the 2012, 2016, and 2020 elections, respectively. These years align with Bitcoin halving events, which reduce its supply and often precede price surges. This year’s rally also aligns with expectations of lower Federal Reserve interest rates.
As the dust settles, crypto enthusiasts are optimistic about a new era for Bitcoin and the broader cryptocurrency market under a Trump administration. However, investors await concrete policy steps to better understand the future landscape for crypto in the U.S.
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